U.K. to Set Up $2.9 Billion Fund to Boost New Home Building

The U.K. is setting up a 2.3 billion pound ($2.9 billion) housing infrastructure fund as it seeks to slow home-price rises.

The fund will develop infrastructure to help support the construction of 100,000 homes by 2021, Chancellor of the Exchequer Philip Hammond said in the Autumn Statement on Wednesday. An additional 1.4 billion pounds will be spent to help deliver 40,000 affordable homes, Hammond said.

“The government expects to more than double annual capital spending on housing,” the Chancellor said, “This commitment to housing supply represents a step change in our ambitions on housing for sale and for rent.”

The government needs to build around 200,000 new homes a year to meet demand, according to broker Savills Plc. Almost 50,000 fewer houses and apartments were completed from 2015 to 2016, according to government statistics. That gap has stretched affordability levels, especially in London, as values reach record highs.

“The Chancellor missed a golden opportunity to kick-start the supply of new homes by not offering tax-incentives to release brownfield and greenfield sites,” Robert Pullen, a senior manager at accountancy firm Blick Rothenberg said in an e-mail. “The housing infrastructure fund will help, but we could have done more.”